News Release

Warsaw

The dynamic growth of business services sector translates into the industry's demand for office space. Business services tenants' share of occupied office space is 55% in Kraków, 44% in Łódź and 41% in Wrocław

International advisory company JLL has published its research analysis entitled "Poland: Offices for modern business services". The paper examines the development opportunities in Poland for the business services sector, especially in the field of access to high quality office space.

In the last few years, Poland has become the leader in terms of employment in the business services sector in Central and Eastern Europe (CEE) and an important location on the global business services map, thanks to a combination of features including a large pool of highly-qualified and experienced employees with good knowledge of foreign languages, economic stability, strategic location and a developed infrastructure. According to the latest Gartner research on investment attractiveness of the EMEA region's countries, Poland is the strongest of the thirteen locations analysed.

According to ABSL, business services centres with foreign capital employ over 128,000 people. Employment in the modern business services sector in Poland has grown in recent years by 10-20% per annum and is expected to continue at the same pace in 2014. New investments, as well as re-investment in existing centres will unquestionably help to promote this growth. This not only proves the quality of the services delivered but also of investors' confidence. Moreover, such companies regard Poland as a long-term investment destination in which they may settle, expand their portfolio in the field of services based on knowledge, and continuously evolve their businesses.

Marek Grodziński, ABSL Vice President, Vice President, Head of European BPO Delivery Centers and board member of Capgemini Poland, commented: "Over the last ten years, the business services sector in Poland has achieved maturity. This means that companies can relocate any type of services here. Moreover, organizations already present in Poland have the knowledge and resources that enable them to manage virtually any business processes, even the most complex ones. For the past decade, we have acquired competencies thanks to which Polish specialists manage strategic business operations and are leaders of international projects in areas including finance, business transformation, procurement and IT. Global brands appreciate Poland's specialization, which is why they are eager to choose the country as a destination for new investment or decide to further develop centers already established here".

According to ABSL, over 470 business centres with foreign capital operate in our country. Moreover, Poland has 44% of all sourcing centres in CEE (Everest Group, Feb. 2014) and this share will increase shortly due to the fact that new investments, as well as re-investment in existing centres, will further help to promote this growth.

Jakub Sylwestrowicz, Head of Tenant Representation, JLL,said: "The dynamic growth of the business services sector easily translates into the sector's demand for office space. As a result, this industry is the key driver of development of office markets, especially outside Warsaw. In 2013, foreign companies from the business services sector leased approximately 200,000 sq m of office space outside Warsaw. Now the business services tenants share in occupied office space is 55% in Kraków, 44% in Łódź and 41% in Wrocław".

Anna Bartoszewicz-Wnuk, Head of Research and Consultancy, JLL, commented: "Poland's office market is one of the most dynamic and quickly developing markets in Europe. With 7.1 million sq m of modern office stock, it is also the largest in the entire Central and Eastern Europe region. Crucially, Poland offers a wide range of office locations for potential tenants, from Warsaw and the other major cities of Kraków, Wrocław, Tri-City, Katowice, Poznań, Łódź, Szczecin and Lublin, to smaller office markets. No other country in Central and Eastern Europe is able to offer so many potential locations to the business services sector which seeks flexibility and efficiency of office space and security of operations".

Currently, 1,180,000 sq m of office space is under construction across Poland. Companies which are looking for office space should take into account vacant space in existing buildings (more than 850,000 sq m in Poland, of which 68% can be found in Warsaw, followed by Tri-City – 8% and Wrocław 6.5%) as well as available space in buildings currently under construction (895,000 sq m evenly distributed between Warsaw and other major office markets in Poland).

"The high level of construction activity indicates that more quality space will come onto the market in the short to medium term. Importantly, both international and domestic developers are well aware of the specific space requirements that the modern business services sector demands. Most office buildings in Poland meet A-Class standard and offer flexible layouts and effective floor plans meaning expansion or internal re-arrangement can be performed efficiently. This makes the expansion or reorganisation of an office more convenient and easier for tenants, minimizing the impact on the company's current operations", Jakub Sylwestrowiczadded.

Rents

Headline rents for prime quality buildings in established office markets outside Warsaw range between €11 and €15 per sq m a month. In new or emerging locations (Białystok, Bydgoszcz, Kielce, Olsztyn, Opole, Radom, Rzeszów and Toruń), rents are even more attractive, ranging between €8 and €13 / sq m / month. The high level of construction activity may result in further downward trends on certain markets.